FTC Targets Cash Flow Infomercial

The Federal Trade Commission has filed suit in a Colorado U.S. District Court to block broadcast and cable TV infomercials for ‘Winning in the Cash Flow Business' and try to recoup the money paid by consumers the FTC says was deceived by the ads into thinking they could make a killing trading in seller-financed promissory notes.

The ads, featuring actor Gary Collins, have aired "tens of thousands of times on broadcast and cable television," said the FTC, and is one of the top 100 most distributed TV infomercials.

The FTC says that Dalbey Education Institute CEO Russell Dalbey defrauded customers with deceptive claims that they could make big bucks quickly and with little work and misled them about how much they could actually make and how long it would take.

"'Winning in the Cash Flow Business' was a real loser for hundreds of thousands of consumers nationwide," said David Vladeck, Director of the FTC's Bureau of Consumer Protection, in announcing the complaint. "When someone is selling a program designed to help people make money, they have to accurately describe how much consumers can expect to make and be truthful about how quickly they will be able to do so. None of that happened in this case, and people who bought the program paid the price."

The FTC says consumers shelled out between $40 and $160 initially and some hundreds or thousands more on additional products like coaching, seminars and lead lists. "Few of these consumers made the money that Dalbey promised them," said the FTC, which is teaming with the state of Colorado to try to get Dabney to stop making the claims and refund the money.

The FTC said it had reached a settlement with one of the people featured in an infomercial, its first ever with an individual for a testimonial. Marsha Kellogg has agreed to cooperate with the FTC's investigation of Dalbey and is prohibited from making misrepresentations in the future. Kellogg falsely claimed in the infomercial that she had earned $79,975.01 from one transaction and inflated her total earnings by $50,000.